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REALTOR®
CODE OF ETHICS
Code of Ethics and Standards of Practice
of the NATIONAL ASSOCIATION OF REALTORS
®
Effective January 1, 2008
Where the word REALTORS®
is used in this Code and Preamble, it shall be deemed to include REALTOR-ASSOCIATE®s.
While the Code of Ethics establishes obligations
that may be higher than those mandated by law, in any instance where the Code
of Ethics and the law conflict, the obligations of the law must take
precedence.
Preamble
Under all is the land. Upon its wise utilization
and widely allocated ownership depend the survival and growth of free
institutions and of our civilization. REALTORS®
should recognize that the interests of the nation and its citizens require the
highest and best use of the land and the widest distribution of land
ownership. They require the creation of adequate housing, the building of
functioning cities, the development of productive industries and farms, and
the preservation of a healthful environment.
Such interests impose obligations beyond those of
ordinary commerce. They impose grave social responsibility and a patriotic
duty to which REALTORS®
should dedicate themselves, and for which they should be diligent in preparing
themselves. REALTORS®,
therefore, are zealous to maintain and improve the standards of their calling
and share with their fellow REALTORS®
a common responsibility for its integrity and honor.
In recognition and appreciation of their
obligations to clients, customers, the public, and each other, REALTORS®
continuously strive to become and remain informed on issues affecting real
estate and, as knowledgeable professionals, they willingly share the fruit of
their experience and study with others. They identify and take steps, through
enforcement of this Code of Ethics and by assisting appropriate regulatory
bodies, to eliminate practices which may damage the public or which might
discredit or bring dishonor to the real estate profession. REALTORS®
having direct personal knowledge of conduct that may violate the Code of
Ethics involving misappropriation of client or customer funds or property,
willful discrimination, or fraud resulting in substantial economic harm, bring
such matters to the attention of the appropriate Board or Association of
REALTORS®.
(Amended 1/00)
Realizing that cooperation with other real estate
professionals promotes the best interests of those who utilize their services,
REALTORS®
urge exclusive representation of clients; do not attempt to gain any unfair
advantage over their competitors; and they refrain from making unsolicited
comments about other practitioners. In instances where their opinion is
sought, or where REALTORS®
believe that comment is necessary, their opinion is offered in an objective,
professional manner, uninfluenced by any personal motivation or potential
advantage or gain.
The term REALTOR®
has come to connote competency, fairness, and high integrity resulting from
adherence to a lofty ideal of moral conduct in business relations. No
inducement of profit and no instruction from clients ever can justify
departure from this ideal.
In the interpretation of this obligation,
REALTORS®
can take no safer guide than that which has been handed down through the
centuries, embodied in the Golden Rule, “Whatsoever ye would that others
should do to you, do ye even so to them.”
Accepting this standard as their own, REALTORS®
pledge to observe its spirit in all of their activities whether conducted
personally, through associates or others, or via technological means, and to
conduct their business in accordance with the tenets set forth below. (Amended
1/07)
Duties to Clients and Customers
Article 1
When representing a buyer, seller, landlord,
tenant, or other client as an agent, REALTORS®
pledge themselves to protect and promote the interests of their client. This
obligation to the client is primary, but it does not relieve REALTORS®
of their obligation to treat all parties honestly. When serving a buyer,
seller, landlord, tenant or other party in a non-agency capacity, REALTORS®
remain obligated to treat all parties honestly. (Amended 1/01)
Standard of Practice 1-1
®,
when acting as principals in a real estate transaction, remain obligated by
the duties imposed by the Code of Ethics. (Amended 1/93)
Standard of Practice 1-2
The duties imposed by the Code of Ethics encompass all real estate-related
activities and transactions whether conducted in person, electronically, or
through any other means.
The duties the Code of Ethics imposes are
applicable whether REALTORS®
are acting as agents or in legally recognized non-agency capacities except
that any duty imposed exclusively on agents by law or regulation shall not
be imposed by this Code of Ethics on REALTORS®
acting in non-agency capacities.
As used in this Code of Ethics, “client” means
the person(s) or entity(ies) with whom a REALTOR®
or a REALTOR®’s
firm has an agency or legally recognized non-agency relationship; “customer”
means a party to a real estate transaction who receives information,
services, or benefits but has no contractual relationship with the REALTOR®
or the REALTOR®’s
firm; “prospect” means a purchaser, seller, tenant, or landlord who is not
subject to a representation relationship with the REALTOR®
or REALTOR®’s
firm; “agent” means a real estate licensee (including brokers and sales
associates) acting in an agency relationship as defined by state law or
regulation; and “broker” means a real estate licensee (including brokers and
sales associates) acting as an agent or in a legally recognized non-agency
capacity. (Adopted 1/95, Amended 1/07)
Standard of Practice 1-3
®,
in attempting to secure a listing, shall not deliberately mislead the owner
as to market value.
Standard of Practice 1-4
®,
when seeking to become a buyer/tenant representative, shall not mislead
buyers or tenants as to savings or other benefits that might be realized
through use of the REALTOR®’s
services. (Amended 1/93)
Standard of Practice 1-5
®
may represent the seller/landlord and buyer/tenant in the same transaction
only after full disclosure to and with informed consent of both parties.
(Adopted 1/93)
Standard of Practice 1-6
®
shall submit offers and counter-offers objectively and as quickly as
possible. (Adopted 1/93, Amended 1/95)
Standard of Practice 1-7
When acting as listing brokers, REALTORS ®
shall continue to submit to the seller/landlord all offers and
counter-offers until closing or execution of a lease unless the
seller/landlord has waived this obligation in writing. REALTORS®
shall not be obligated to continue to market the property after an offer has
been accepted by the seller/landlord. REALTORS®
shall recommend that sellers/landlords obtain the advice of legal counsel
prior to acceptance of a subsequent offer except where the acceptance is
contingent on the termination of the pre-existing purchase contract or
lease. (Amended 1/93)
Standard of Practice 1-8
®
, acting as agents or brokers of buyers/tenants, shall submit to
buyers/tenants all offers and counter-offers until acceptance but have no
obligation to continue to show properties to their clients after an offer
has been accepted unless otherwise agreed in writing. REALTORS®,
acting as agents or brokers of buyers/tenants, shall recommend that
buyers/tenants obtain the advice of legal counsel if there is a question as
to whether a pre-existing contract has been terminated. (Adopted 1/93,
Amended 1/99)
Standard of Practice 1-9
The obligation of REALTORS ®
to preserve confidential information (as defined by state law) provided by
their clients in the course of any agency relationship or non-agency
relationship recognized by law continues after termination of agency
relationships or any non-agency relationships recognized by law. REALTORS®
shall not knowingly, during or following the termination of professional
relationships with their clients:
- reveal confidential information of clients; or
use confidential information of clients to the disadvantage of
clients; or
use confidential information of clients for the REALTOR®’s
advantage or the advantage of third parties unless:
- clients consent after full disclosure; or
REALTORS®
are required by court order; or
it is the intention of a client to commit a crime and the
information is necessary to prevent the crime; or
it is necessary to defend a REALTOR®
or the REALTOR®’s
employees or associates against an accusation of wrongful conduct.
Information concerning latent material defects
is not considered confidential information under this Code of Ethics.
(Adopted 1/93, Amended 1/01)
Standard of Practice 1-10
®
shall, consistent with the terms and conditions of their real estate
licensure and their property management agreement, competently manage the
property of clients with due regard for the rights, safety and health of
tenants and others lawfully on the premises. (Adopted 1/95, Amended 1/00)
Standard of Practice 1-11
®
who are employed to maintain or manage a client’s property shall exercise
due diligence and make reasonable efforts to protect it against reasonably
foreseeable contingencies and losses. (Adopted 1/95)
Standard of Practice 1-12
When entering into listing contracts, REALTORS ®
must advise sellers/landlords of:
- the REALTOR
®’s
company policies regarding cooperation and the amount(s) of any
compensation that will be offered to subagents, buyer/tenant agents,
and/or brokers acting in legally recognized non-agency capacities;
the fact that buyer/tenant agents or brokers, even if compensated by
listing brokers, or by sellers/landlords may represent the interests of
buyers/tenants; and
any potential for listing brokers to act as disclosed dual agents,
e.g. buyer/tenant agents. (Adopted 1/93, Renumbered 1/98, Amended 1/03)
Standard of Practice 1-13
When entering into buyer/tenant agreements, REALTORS ®
must advise potential clients of:
- the REALTOR
®’s
company policies regarding cooperation;
the amount of compensation to be paid by the client;
the potential for additional or offsetting compensation from other
brokers, from the seller or landlord, or from other parties;
any potential for the buyer/tenant representative to act as a
disclosed dual agent, e.g. listing broker, subagent, landlord’s agent,
etc., and
the possibility that sellers or sellers' representatives may not treat
the existence, terms, or conditions of offers as confidential unless
confidentiality is required by law, regulation, or by any confidentiality
agreement between the parties. (Adopted 1/93, Renumbered 1/98, Amended
1/06)
Standard of Practice 1-14
Fees for preparing appraisals or other valuations shall not be contingent
upon the amount of the appraisal or valuation. (Adopted 1/02)
Standard of Practice 1-15
®,
in response to inquiries from buyers or cooperating brokers shall, with the
sellers’ approval, disclose the existence of offers on the property. Where
disclosure is authorized, REALTORS® shall also disclose whether offers were
obtained by the listing licensee, another licensee in the listing firm, or
by a cooperating broker. (Adopted 1/03, Amended 1/06))
Article 2
REALTORS®
shall avoid exaggeration, misrepresentation, or concealment of pertinent facts
relating to the property or the transaction. REALTORS®
shall not, however, be obligated to discover latent defects in the property,
to advise on matters outside the scope of their real estate license, or to
disclose facts which are confidential under the scope of agency or non-agency
relationships as defined by state law. (Amended 1/00)
Standard of Practice 2-1
®
shall only be obligated to discover and disclose adverse factors reasonably
apparent to someone with expertise in those areas required by their real
estate licensing authority. Article 2 does not impose upon the REALTOR®
the obligation of expertise in other professional or technical disciplines.
(Amended 1/96)
Standard of Practice 2-2
(Renumbered as Standard of Practice 1-12 1/98)
Standard of Practice 2-3
(Renumbered as Standard of Practice 1-13 1/98)
Standard of Practice 2-4
®
shall not be parties to the naming of a false consideration in any document,
unless it be the naming of an obviously nominal consideration.
Standard of Practice 2-5
Factors defined as “non-material” by law or regulation or which are
expressly referenced in law or regulation as not being subject to disclosure
are considered not “pertinent” for purposes of Article 2. (Adopted 1/93)
Article 3
REALTORS®
shall cooperate with other brokers except when cooperation is not in the
client’s best interest. The obligation to cooperate does not include the
obligation to share commissions, fees, or to otherwise compensate another
broker. (Amended 1/95)
Standard of Practice 3-1
®,
acting as exclusive agents or brokers of sellers/ landlords, establish the
terms and conditions of offers to cooperate. Unless expressly indicated in
offers to cooperate, cooperating brokers may not assume that the offer of
cooperation includes an offer of compensation. Terms of compensation, if
any, shall be ascertained by cooperating brokers before beginning efforts to
accept the offer of cooperation. (Amended 1/99)
Standard of Practice 3-2
®
shall, with respect to offers of compensation to another REALTOR®,
timely communicate any change of compensation for cooperative services to
the other REALTOR®
prior to the time such REALTOR®
produces an offer to purchase/lease the property. (Amended 1/94)
Standard of Practice 3-3
Standard of Practice 3-2 does not preclude the listing broker and
cooperating broker from entering into an agreement to change cooperative
compensation. (Adopted 1/94)
Standard of Practice 3-4
®,
acting as listing brokers, have an affirmative obligation to disclose the
existence of dual or variable rate commission arrangements (i.e., listings
where one amount of commission is payable if the listing broker’s firm is
the procuring cause of sale/lease and a different amount of commission is
payable if the sale/lease results through the efforts of the seller/
landlord or a cooperating broker). The listing broker shall, as soon as
practical, disclose the existence of such arrangements to potential
cooperating brokers and shall, in response to inquiries from cooperating
brokers, disclose the differential that would result in a cooperative
transaction or in a sale/lease that results through the efforts of the
seller/landlord. If the cooperating broker is a buyer/tenant representative,
the buyer/tenant representative must disclose such information to their
client before the client makes an offer to purchase or lease. (Amended 1/02)
Standard of Practice 3-5
It is the obligation of subagents to promptly disclose all pertinent facts
to the principal’s agent prior to as well as after a purchase or lease
agreement is executed. (Amended 1/93)
Standard of Practice 3-6
®
shall disclose the existence of accepted offers, including offers with
unresolved contingencies, to any broker seeking cooperation. (Adopted 5/86,
Amended 1/04)
Standard of Practice 3-7
When seeking information from another REALTOR ®
concerning property under a management or listing agreement, REALTORS®
shall disclose their REALTOR®
status and whether their interest is personal or on behalf of a client and,
if on behalf of a client, their representational status. (Amended 1/95)
Standard of Practice 3-8
®
shall not misrepresent the availability of access to show or inspect a
listed property. (Amended 11/87)
Article 4
REALTORS®
shall not acquire an interest in or buy or present offers from themselves, any
member of their immediate families, their firms or any member thereof, or any
entities in which they have any ownership interest, any real property without
making their true position known to the owner or the owner’s agent or broker.
In selling property they own, or in which they have any interest, REALTORS®
shall reveal their ownership or interest in writing to the purchaser or the
purchaser’s representative. (Amended 1/00)
Standard of Practice 4-1
For the protection of all parties, the disclosures required by Article 4
shall be in writing and provided by REALTORS ®
prior to the signing of any contract. (Adopted 2/86)
Article 5
REALTORS®
shall not undertake to provide professional services concerning a property or
its value where they have a present or contemplated interest unless such
interest is specifically disclosed to all affected parties.
Article 6
REALTORS®
shall not accept any commission, rebate, or profit on expenditures made for
their client, without the client’s knowledge and consent.
When recommending real estate products or
services (e.g., homeowner’s insurance, warranty programs, mortgage financing,
title insurance, etc.), REALTORS®
shall disclose to the client or customer to whom the recommendation is made
any financial benefits or fees, other than real estate referral fees, the
REALTOR®
or REALTOR®’s
firm may receive as a direct result of such recommendation. (Amended 1/99)
Standard of Practice 6-1
®
shall not recommend or suggest to a client or a customer the use of services
of another organization or business entity in which they have a direct
interest without disclosing such interest at the time of the recommendation
or suggestion. (Amended 5/88)
Article 7
In a transaction, REALTORS®
shall not accept compensation from more than one party, even if permitted by
law, without disclosure to all parties and the informed consent of the REALTOR®’s
client or clients. (Amended 1/93)
Article 8
REALTORS®
shall keep in a special account in an appropriate financial institution,
separated from their own funds, monies coming into their possession in trust
for other persons, such as escrows, trust funds, clients’ monies, and other
like items.
Article 9
REALTORS®,
for the protection of all parties, shall assure whenever possible that all
agreements related to real estate transactions including, but not limited to,
listing and representation agreements, purchase contracts, and leases are in
writing in clear and understandable language expressing the specific terms,
conditions, obligations and commitments of the parties. A copy of each
agreement shall be furnished to each party to such agreements upon their
signing or initialing. (Amended 1/04)
Standard of Practice 9-1
For the protection of all parties, REALTORS ®
shall use reasonable care to ensure that documents pertaining to the
purchase, sale, or lease of real estate are kept current through the use of
written extensions or amendments. (Amended 1/93)
Standard of Practice 9-2
When assisting or enabling a client or customer in establishing a
contractual relationship (e.g., listing and representation agreements,
purchase agreements, leases, etc.) electronically, REALTORS ®
shall make reasonable efforts to
explain the nature and disclose the specific terms of the contractual
relationship being established prior to it being agreed to by a contracting
party. (Adopted 1/07)
Duties to the Public
Article 10
REALTORS®
shall not deny equal professional services to any person for reasons of race,
color, religion, sex, handicap, familial status, or national origin. REALTORS®
shall not be parties to any plan or agreement to discriminate against a person
or persons on the basis of race, color, religion, sex, handicap, familial
status, or national origin. (Amended 1/90)
REALTORS®,
in their real estate employment practices, shall not discriminate against any
person or persons on the basis of race, color, religion, sex, handicap,
familial status, or national origin. (Amended 1/00)
Standard of Practice 10-1
When involved in the sale or lease of a residence, REALTORS ®
shall not volunteer information regarding the racial, religious or ethnic
composition of any neighborhood nor shall they engage in any activity which
may result in panic selling, however, REALTORS®
may provide other demographic information. (Adopted 1/94, Amended 1/06)
Standard of Practice 10-2
When not involved in the sale or lease of a residence, REALTORS ®
may provide demographic information related to a property, transaction or
professional assignment to a party if such demographic information is (a)
deemed by the REALTOR®
to be needed to assist with or complete, in a manner consistent with Article
10, a real estate transaction or professional assignment and (b) is obtained
or derived from a recognized, reliable, independent, and impartial source.
The source of such information and any additions, deletions, modifications,
interpretations, or other changes shall be disclosed in reasonable detail.
(Adopted 1/05, Renumbered 1/06)
Standard of Practice 10-3
®
shall not print, display or circulate any statement or advertisement with
respect to selling or renting of a property that indicates any preference,
limitations or discrimination based on race, color, religion, sex, handicap,
familial status, or national origin. (Adopted 1/94, Renumbered 1/05 and
1/06)
Standard of Practice 10-4
As used in Article 10 “real estate employment practices” relates to
employees and independent contractors providing real estate-related services
and the administrative and clerical staff directly supporting those
individuals. (Adopted 1/00, Renumbered 1/05)
Article 11
The services which REALTORS®
provide to their clients and customers shall conform to the standards of
practice and competence which are reasonably expected in the specific real
estate disciplines in which they engage; specifically, residential real estate
brokerage, real property management, commercial and industrial real estate
brokerage, real estate appraisal, real estate counseling, real estate
syndication, real estate auction, and international real estate.
REALTORS®
shall not undertake to provide specialized professional services concerning a
type of property or service that is outside their field of competence unless
they engage the assistance of one who is competent on such types of property
or service, or unless the facts are fully disclosed to the client. Any persons
engaged to provide such assistance shall be so identified to the client and
their contribution to the assignment should be set forth. (Amended 1/95)
Standard of Practice 11-1
®
prepare opinions of real property value or price, other than in pursuit of a
listing or to assist a potential purchaser in formulating a purchase offer,
such opinions shall include the following:
- identification of the subject property
date prepared
defined value or price
limiting conditions, including statements of purpose(s) and intended
user(s)
any present or contemplated interest, including the possibility of
representing the seller/landlord or buyers/tenants
basis for the opinion, including applicable market data
if the opinion is not an appraisal, a statement to that effect
(Amended 1/01)
Standard of Practice 11-2
The obligations of the Code of Ethics in respect of real estate disciplines
other than appraisal shall be interpreted and applied in accordance with the
standards of competence and practice which clients and the public reasonably
require to protect their rights and interests considering the complexity of
the transaction, the availability of expert assistance, and, where the
REALTOR ®
is an agent or subagent, the obligations of a fiduciary. (Adopted 1/95)
Standard of Practice 11-3
®
provide consultive services to clients which involve advice or counsel for a
fee (not a commission), such advice shall be rendered in an objective manner
and the fee shall not be contingent on the substance of the advice or
counsel given. If brokerage or transaction services are to be provided in
addition to consultive services, a separate compensation may be paid with
prior agreement between the client and REALTOR®.
(Adopted 1/96)
Standard of Practice 11-4
The competency required by Article 11 relates to services contracted for
between REALTORS ®
and their clients or customers; the duties expressly imposed by the Code of
Ethics; and the duties imposed by law or regulation. (Adopted 1/02)
Article 12
REALTORS®
shall be honest and truthful in their real estate communications and shall
present a true picture in their advertising, marketing, and other
representations. REALTORS®
shall ensure that their status as real estate professionals is readily
apparent in their advertising, marketing, and other representations, and that
the recipients of all real estate communications are, or have been, notified
that those communications are from a real estate professional. (Amended 1/08)
Standard of Practice 12-1
®
may use the term “free” and similar terms in their advertising and in other
representations provided that all terms governing availability of the
offered product or service are clearly disclosed at the same time. (Amended
1/97)
Standard of Practice 12-2
®
may represent their services as “free” or without cost even if they expect
to receive compensation from a source other than their client provided that
the potential for the REALTOR®
to obtain a benefit from a third party is clearly disclosed at the same
time. (Amended 1/97)
Standard of Practice 12-3
The offering of premiums, prizes, merchandise discounts or other inducements
to list, sell, purchase, or lease is not, in itself, unethical even if
receipt of the benefit is contingent on listing, selling, purchasing, or
leasing through the REALTOR ®
making the offer. However, REALTORS®
must exercise care and candor in any such advertising or other public or
private representations so that any party interested in receiving or
otherwise benefiting from the REALTOR®’s
offer will have clear, thorough, advance understanding of all the terms and
conditions of the offer. The offering of any inducements to do business is
subject to the limitations and restrictions of state law and the ethical
obligations established by any applicable Standard of Practice. (Amended
1/95)
Standard of Practice 12-4
®
shall not offer for sale/lease or advertise property without authority. When
acting as listing brokers or as subagents, REALTORS®
shall not quote a price different from that agreed upon with the
seller/landlord. (Amended 1/93)
Standard of Practice 12-5
®
shall not advertise nor permit any person employed by or affiliated with
them to advertise listed property in any medium (e.g., electronically,
print, radio, television, etc.) without disclosing the name of that REALTOR®'s
firm in a reasonable and readily apparent manner. (Adopted 11/86, Amended
1/07)
Standard of Practice 12-6
®,
when advertising unlisted real property for sale/lease in which they have an
ownership interest, shall disclose their status as both owners/landlords and
as REALTORS®
or real estate licensees. (Amended 1/93)
Standard of Practice 12-7
®
who participated in the transaction as the listing broker or cooperating
broker (selling broker) may claim to have “sold” the property. Prior to
closing, a cooperating broker may post a “sold” sign only with the consent
of the listing broker. (Amended 1/96)
Standard of Practice 12-8
The obligation to present a true picture in representations to the public
includes information presented, provided, or displayed on REALTORS ®’
websites. REALTORS®
shall use reasonable efforts to ensure that information on their websites is
current. When it becomes apparent that information on a REALTOR®’s
website is no longer current or accurate, REALTORS®
shall promptly take corrective
action. (Adopted 1/07)
Standard of Practice 12-9
®
firm websites shall disclose the firm’s name and state(s) of licensure in a
reasonable and readily apparent manner.
Websites of REALTORS®
and non-member licensees affiliated with a REALTOR®
firm shall disclose the firm’s name and that REALTOR®’s
or non-member licensee’s state(s) of licensure in a reasonable and readily
apparent manner. (Adopted 1/07)
Standard of Practice 12-10
®’
obligation to present a true picture in their advertising and
representations to the public includes the URLs and domain names they use,
and prohibits REALTORS®
from:
- engaging in deceptive or unauthorized framing of real estate
brokerage websites;
manipulating (e.g., presenting content developed by others)
listing content in any way that produces a deceptive or misleading result;
or
deceptively using metatags, keywords or other devices/methods
to direct, drive, or divert Internet traffic, or to otherwise mislead
consumers. (Adopted 1/07)
Standard of Practice 12-11
®
intending to share or sell consumer information
gathered via the Internet shall disclose that possibility in a reasonable
and readily apparent manner. (Adopted 1/07)
Standard of Practice 12-12
®
shall not:
- use URLs or domain names that present less than a true
picture, or
register URLs or domain names which, if used, would present
less than a true picture. (Adopted 1/08)
Standard of Practice 12-13
The obligation to present a true picture in advertising, marketing, and
representations allows REALTORS ®
to use and display only professional designations, certifications, and other
credentials to which they are legitimately entitled. (Adopted 1/08)
Article 13
REALTORS®
shall not engage in activities that constitute the unauthorized practice of
law and shall recommend that legal counsel be obtained when the interest of
any party to the transaction requires it.
Article 14
If charged with unethical practice or asked to
present evidence or to cooperate in any other way, in any professional
standards proceeding or investigation, REALTORS®
shall place all pertinent facts before the proper tribunals of the Member
Board or affiliated institute, society, or council in which membership is held
and shall take no action to disrupt or obstruct such processes. (Amended 1/99)
Standard of Practice 14-1
®
shall not be subject to disciplinary proceedings in more than one Board of
REALTORS®
or affiliated institute, society or council in which they hold membership
with respect to alleged violations of the Code of Ethics relating to the
same transaction or event. (Amended 1/95)
Standard of Practice 14-2
®
shall not make any unauthorized disclosure or dissemination of the
allegations, findings, or decision developed in connection with an ethics
hearing or appeal or in connection with an arbitration hearing or procedural
review. (Amended 1/92)
Standard of Practice 14-3
®
shall not obstruct the Board’s investigative or professional standards
proceedings by instituting or threatening to institute actions for libel,
slander or defamation against any party to a professional standards
proceeding or their witnesses based on the filing of an arbitration request,
an ethics complaint, or testimony given before any tribunal. (Adopted 11/87,
Amended 1/99)
Standard of Practice 14-4
®
shall not intentionally impede the Board’s investigative or disciplinary
proceedings by filing multiple ethics complaints based on the same event or
transaction. (Adopted 11/88)
Duties to REALTORS®
Article 15
REALTORS®
shall not knowingly or recklessly make false or misleading statements about
competitors, their businesses, or their business practices. (Amended 1/92)
Standard of Practice 15-1
®
shall not knowingly or recklessly file false or unfounded ethics complaints.
(Adopted 1/00)
Standard of Practice 15-2
The obligation to refrain from making false or misleading statements about
competitors’ businesses and competitors’ business practices includes the
duty to not knowingly or recklessly repeat, retransmit, or republish false
or misleading statements made by others. This duty applies whether false or
misleading statements are repeated in person, in writing, by technological
means (e.g., the Internet), or by any other means. (Adopted 1/07)
Article 16
REALTORS®
shall not engage in any practice or take any action inconsistent with
exclusive representation or exclusive brokerage relationship agreements that
other REALTORS®
have with clients. (Amended 1/04)
Standard of Practice 16-1
Article 16 is not intended to prohibit aggressive or innovative business
practices which are otherwise ethical and does not prohibit disagreements
with other REALTORS ®
involving commission, fees, compensation or other forms of payment or
expenses. (Adopted 1/93, Amended 1/95)
Standard of Practice 16-2
Article 16 does not preclude REALTORS ®
from making general announcements to prospects describing their services and
the terms of their availability even though some recipients may have entered
into agency agreements or other exclusive relationships with another REALTOR®.
A general telephone canvass, general mailing or distribution addressed to
all prospects in a given geographical area or in a given profession,
business, club, or organization, or other classification or group is deemed
“general” for purposes of this standard. (Amended 1/04)
Article 16 is intended to recognize as
unethical two basic types of solicitations:
First, telephone or personal solicitations of
property owners who have been identified by a real estate sign, multiple
listing compilation, or other information service as having exclusively
listed their property with another REALTOR®;
and
Second, mail or other forms of written
solicitations of prospects whose properties are exclusively listed with
another REALTOR®
when such solicitations are not part of a general mailing but are directed
specifically to property owners identified through compilations of current
listings, “for sale” or “for rent” signs, or other sources of information
required by Article 3 and Multiple Listing Service rules to be made
available to other REALTORS®
under offers of subagency or cooperation. (Amended 1/04)
Standard of Practice 16-3
Article 16 does not preclude REALTORS ®
from contacting the client of another broker for the purpose of offering to
provide, or entering into a contract to provide, a different type of real
estate service unrelated to the type of service currently being provided
(e.g., property management as opposed to brokerage) or from offering the
same type of service for property not subject to other brokers’ exclusive
agreements. However, information received through a Multiple Listing Service
or any other offer of cooperation may not be used to target clients of other
REALTORS®
to whom such offers to provide services may be made. (Amended 1/04)
Standard of Practice 16-4
®
shall not solicit a listing which is currently listed exclusively with
another broker. However, if the listing broker, when asked by the REALTOR®,
refuses to disclose the expiration date and nature of such listing; i.e., an
exclusive right to sell, an exclusive agency, open listing, or other form of
contractual agreement between the listing broker and the client, the REALTOR®
may contact the owner to secure such information and may discuss the terms
upon which the REALTOR®
might take a future listing or, alternatively, may take a listing to become
effective upon expiration of any existing exclusive listing. (Amended 1/94)
Standard of Practice 16-5
®
shall not solicit buyer/tenant agreements from buyers/ tenants who are
subject to exclusive buyer/tenant agreements. However, if asked by a REALTOR®,
the broker refuses to disclose the expiration date of the exclusive
buyer/tenant agreement, the REALTOR®
may contact the buyer/tenant to secure such information and may discuss the
terms upon which the REALTOR®
might enter into a future buyer/tenant agreement or, alternatively, may
enter into a buyer/tenant agreement to become effective upon the expiration
of any existing exclusive buyer/tenant agreement. (Adopted 1/94, Amended
1/98)
Standard of Practice 16-6
®
are contacted by the client of another REALTOR®
regarding the creation of an exclusive relationship to provide the same type
of service, and REALTORS®
have not directly or indirectly initiated such discussions, they may discuss
the terms upon which they might enter into a future agreement or,
alternatively, may enter into an agreement which becomes effective upon
expiration of any existing exclusive agreement. (Amended 1/98)
Standard of Practice 16-7
The fact that a prospect has retained a REALTOR® as an exclusive
representative or exclusive broker in one or more past transactions does not
preclude other REALTORS® from seeking such prospect’s future business.
(Amended 1/04)
Standard of Practice 16-8
The fact that an exclusive agreement has been entered into with a REALTOR®
shall not preclude or inhibit any other REALTOR® from entering into a
similar agreement after the expiration of the prior agreement. (Amended
1/98)
Standard of Practice 16-9
REALTORS®, prior to entering into a representation agreement, have an
affirmative obligation to make reasonable efforts to determine whether the
prospect is subject to a current, valid exclusive agreement to provide the
same type of real estate service. (Amended 1/04)
Standard of Practice 16-10
REALTORS®, acting as buyer or tenant representatives or brokers, shall
disclose that relationship to the seller/landlord’s representative or broker
at first contact and shall provide written confirmation of that disclosure
to the seller/landlord’s representative or broker not later than execution
of a purchase agreement or lease. (Amended 1/04)
Standard of Practice 16-11
On unlisted property, REALTORS® acting as buyer/tenant representatives or
brokers shall disclose that relationship to the seller/landlord at first
contact for that buyer/tenant and shall provide written confirmation of such
disclosure to the seller/landlord not later than execution of any purchase
or lease agreement. (Amended 1/04)
REALTORS® shall make any request for
anticipated compensation from the seller/ landlord at first contact.
(Amended 1/98)
Standard of Practice 16-12
REALTORS®, acting as representatives or brokers of sellers/landlords or as
subagents of listing brokers, shall disclose that relationship to
buyers/tenants as soon as practicable and shall provide written confirmation
of such disclosure to buyers/tenants not later than execution of any
purchase or lease agreement. (Amended 1/04)
Standard of Practice 16-13
All dealings concerning property exclusively listed, or with buyer/tenants
who are subject to an exclusive agreement shall be carried on with the
client’s representative or broker, and not with the client, except with the
consent of the client’s representative or broker or except where such
dealings are initiated by the client.
Before providing substantive services (such as
writing a purchase offer or presenting a CMA) to prospects, REALTORS® shall
ask prospects whether they are a party to any exclusive representation
agreement. REALTORS® shall not knowingly provide substantive services
concerning a prospective transaction to prospects who are parties to
exclusive representation agreements, except with the consent of the
prospects’ exclusive representatives or at the direction of prospects.
(Adopted 1/93, Amended 1/04)
Standard of Practice 16-14
REALTORS® are free to enter into contractual relationships or to negotiate
with sellers/ landlords, buyers/tenants or others who are not subject to an
exclusive agreement but shall not knowingly obligate them to pay more than
one commission except with their informed consent. (Amended 1/98)
Standard of Practice 16-15
In cooperative transactions REALTORS® shall compensate cooperating REALTORS®
(principal brokers) and shall not compensate nor offer to compensate,
directly or indirectly, any of the sales licensees employed by or affiliated
with other REALTORS® without the prior express knowledge and consent of the
cooperating broker.
Standard of Practice 16-16
REALTORS®, acting as subagents or buyer/tenant representatives or brokers,
shall not use the terms of an offer to purchase/lease to attempt to modify
the listing broker’s offer of compensation to subagents or buyer/tenant
representatives or brokers nor make the submission of an executed offer to
purchase/lease contingent on the listing broker’s agreement to modify the
offer of compensation. (Amended 1/04)
Standard of Practice 16-17
®,
acting as subagents or as buyer/tenant representatives or brokers, shall not
attempt to extend a listing broker’s offer of cooperation and/or
compensation to other brokers without the consent of the listing broker.
(Amended 1/04)
Standard of Practice 16-18
®
shall not use information obtained from listing brokers through offers to
cooperate made through multiple listing services or through other offers of
cooperation to refer listing brokers’ clients to other brokers or to create
buyer/tenant relationships with listing brokers’ clients, unless such use is
authorized by listing brokers. (Amended 1/02)
Standard of Practice 16-19
Signs giving notice of property for sale, rent, lease, or exchange shall not
be placed on property without consent of the seller/landlord. (Amended 1/93)
Standard of Practice 16-20
®,
prior to or after terminating their relationship with their current firm,
shall not induce clients of their current firm to cancel exclusive
contractual agreements between the client and that firm. This does not
preclude REALTORS®
(principals) from establishing agreements with their associated licensees
governing assignability of exclusive agreements. (Adopted 1/98)
Article 17
In the event of contractual disputes or specific
non-contractual disputes as defined in Standard of Practice 17-4 between
REALTORS®
(principals) associated with different firms, arising out of their
relationship as REALTORS®,
the REALTORS®
shall submit the dispute to arbitration in accordance with the regulations of
their Board or Boards rather than litigate the matter.
In the event clients of REALTORS®
wish to arbitrate contractual disputes arising out of real estate
transactions, REALTORS®
shall arbitrate those disputes in accordance with the regulations of their
Board, provided the clients agree to be bound by the decision.
The obligation to participate in arbitration
contemplated by this Article includes the obligation of REALTORS®
(principals) to cause their firms to arbitrate and be bound by any award.
(Amended 1/01)
Standard of Practice 17-1
The filing of litigation and refusal to withdraw from it by REALTORS ®
in an arbitrable matter constitutes a refusal to arbitrate. (Adopted 2/86)
Standard of Practice 17-2
Article 17 does not require REALTORS ®
to arbitrate in those circumstances when all parties to the dispute advise
the Board in writing that they choose not to arbitrate before the Board.
(Amended 1/93)
Standard of Practice 17-3
®,
when acting solely as principals in a real estate transaction, are not
obligated to arbitrate disputes with other REALTORS®
absent a specific written agreement to the contrary. (Adopted 1/96)
Standard of Practice 17-4
Specific non-contractual disputes that are subject to arbitration pursuant
to Article 17 are:
- Where a listing broker has compensated a cooperating broker
and another cooperating broker subsequently claims to be the procuring
cause of the sale or lease. In such cases the complainant may name the
first cooperating broker as respondent and arbitration may proceed without
the listing broker being named as a respondent. When arbitration occurs
between two (or more) cooperating brokers and where the listing broker is
not a party, the amount in dispute and the amount of any potential
resulting award is limited to the amount paid to the respondent by the
listing broker and any amount credited or paid to a party to the
transaction at the direction of the respondent. Alternatively, if the
complaint is brought against the listing broker, the listing broker may
name the first cooperating broker as a third-party respondent. In either
instance the decision of the hearing panel as to procuring cause shall be
conclusive with respect to all current or subsequent claims of the parties
for compensation arising out of the underlying cooperative transaction.
(Adopted 1/97, Amended 1/07)
Where a buyer or tenant representative is compensated by the
seller or landlord, and not by the listing broker, and the listing broker,
as a result, reduces the commission owed by the seller or landlord and,
subsequent to such actions, another cooperating broker claims to be the
procuring cause of sale or lease. In such cases the complainant may name
the first cooperating broker as respondent and arbitration may proceed
without the listing broker being named as a respondent. When arbitration
occurs between two (or more) cooperating brokers and where the listing
broker is not a party, the amount in dispute and the amount of any
potential resulting award is limited to the amount paid to the respondent
by the seller or landlord and any amount credited or paid to a party to
the transaction at the direction of the respondent. Alternatively, if the
complaint is brought against the listing broker, the listing broker may
name the first cooperating broker as a third-party respondent. In either
instance the decision of the hearing panel as to procuring cause shall be
conclusive with respect to all current or subsequent claims of the parties
for compensation arising out of the underlying cooperative transaction.
(Adopted 1/97, Amended 1/07)
Where a buyer or tenant representative is compensated by the
buyer or tenant and, as a result, the listing broker reduces the
commission owed by the seller or landlord and, subsequent to such actions,
another cooperating broker claims to be the procuring cause of sale or
lease. In such cases the complainant may name the first cooperating broker
as respondent and arbitration may proceed without the listing broker being
named as a respondent. Alternatively, if the complaint is brought against
the listing broker, the listing broker may name the first cooperating
broker as a third-party respondent. In either instance the decision of the
hearing panel as to procuring cause shall be conclusive with respect to
all current or subsequent claims of the parties for compensation arising
out of the underlying cooperative transaction. (Adopted 1/97)
Where two or more listing brokers claim entitlement to
compensation pursuant to open listings with a seller or landlord who
agrees to participate in arbitration (or who requests arbitration) and who
agrees to be bound by the decision. In cases where one of the listing
brokers has been compensated by the seller or landlord, the other listing
broker, as complainant, may name the first listing broker as respondent
and arbitration may proceed between the brokers. (Adopted 1/97)
Where a buyer or tenant representative is compensated by the
seller or landlord, and not by the listing broker, and the listing broker,
as a result, reduces the commission owed by the seller or landlord and,
subsequent to such actions, claims to be the procuring cause of sale or
lease. In such cases arbitration shall be between the listing broker and
the buyer or tenant representative and the amount in dispute is limited to
the amount of the reduction of commission to which the listing broker
agreed. (Adopted 1/05)
Standard of Practice 17-5
The obligation to arbitrate established in Article 17 includes disputes
between REALTORS ®
(principals) in different states in instances where, absent an established
inter–association arbitration agreement, the REALTOR®
(principal) requesting arbitration agrees to submit to the jurisdiction of,
travel to, participate in, and be bound by any resulting award rendered in
arbitration conducted by the respondent(s) REALTOR®’s
association, in instances where the respondent(s) REALTOR®’s
association determines that an arbitrable issue exists. (Adopted 1/07)
The Code of Ethics was adopted in 1913. Amended
at the Annual Convention in 1924, 1928, 1950, 1951, 1952, 1955, 1956, 1961,
1962, 1974, 1982, 1986, 1987, 1989, 1990, 1991, 1992, 1993, 1994, 1995, 1996,
1997, 1998, 1999, 2000, 2001, 2002, 2003, 2004, 2005, 2006, and 2007.
Explanatory Notes
The reader should be aware of the following
policies which have been approved by the Board of Directors of the National
Association:
In filing a charge of an alleged violation of the
Code of Ethics by a REALTOR®,
the charge must read as an alleged violation of one or more Articles of the
Code. Standards of Practice may be cited in support of the charge.
The Standards of Practice serve to clarify the
ethical obligations imposed by the various Articles and supplement, and do not
substitute for, the Case Interpretations in Interpretations of the Code of
Ethics.
Modifications to existing Standards of Practice
and additional new Standards of Practice are approved from time to time.
Readers are cautioned to ensure that the most recent publications are
utilized.
Copyright 2008, National Association of
REALTORS®, All rights reserved. Form No. 166-288 (12/07)
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